Will the upward trend in the property market continue in 2020?

Over the last few years we have witnessed a boom in the property market. New blocks of flats keep appearing in large cities, and flats are selling out at lightning speed. Both new-build properties in Katowice and the secondary market were dominated by sharp rises in prices per m2. Will the market conditions in 2020 be just as favourable for developers and estate agents? Or are we in for gradual stabilisation and a downturn?

What led to the property boom?

Many factors contributed to this state of affairs: a gradual rise in earnings, government programmes aimed at young people thinking of buying a flat, and simplified procedures for obtaining a mortgage. All of this led to a surge in demand for flats for sale in Katowice. Developers quickly sniffed out the opportunity and decided to raise supply in a short time as well. You only need to look at how many large cities in Poland have seen new housing estates of blocks of flats spring up.

The rules governing the property market

The supply delivered in recent years has reached considerable proportions. Much depends, of course, on the city. In the capital of our country, for example, interest in new flats is still enormous. Meanwhile, in somewhat smaller cities the time needed to sell all the flats is getting longer and longer. Estate agencies in Katowice are nevertheless still working at full capacity. Still, it cannot be denied that demand is gradually falling. The property boom will not last forever. We are already seeing a slight slowdown in price rises.

The rules visible in the property market are very simple. In developing countries a moment comes when citizens buy new flats en masse. The factors described above favour this. For several years the market keeps rising, and demand sets current prices. Then a gradual slowdown can be observed. Prices no longer rise as fast and begin to stabilise at a certain level. At that point supply very often once again exceeds demand, and this leads to a temporary slump in the property market. Then flat prices in Katowice become lower year after year, until stabilisation is reached.

Property market forecasts for 2020

Investors must exercise particular caution. In 2020 we will probably still see a buoyant property market. At the same time, price rises should no longer be as intense as they were two or three years ago. Seeing how the prices of flats for sale in Katowice are changing, we can conclude that gradual stabilisation is beginning, and assume that within the next 3-4 years the property market in Poland will "stop" and we will see a gradual decline in prices.

This is the natural course of things that accompanies developing countries. Rising demand is eventually satisfied by developers and estate agencies. After a period of several, or a dozen or so, years of stabilisation, the market starts to improve again. In this respect we can observe cyclical processes in the property market.